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    Caspian Overview: Feeding Tanap; Upstream News from Central Asia



Azerbaijan has enough export potential to expand deliveries to Europe through the Southern Gas Corridor (SGC), Socar's Investment boss Vagif Aliev told NGE.

by: Ilham Shaban

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Caspian Overview: Feeding Tanap; Upstream News from Central Asia

Azerbaijan has enough export potential to expand deliveries to Europe through the Southern Gas Corridor (SGC), the head of state-run Socar's investment department Vagif Aliev told NGE June 29.

Azerbaijani gas is being projected to meet the needed gas for the second phase of SGC's expansion, he said, adding that the transit capacity of Trans Anatolian Pipeline (Tanap) would go up from 16bn m³/yr in 2019 initially to 24bn m³/yr in the second phase of expansion in 2024-2025. "To supply this volume of gas, there are several potential sources, mostly from Azerbaijan’s fields, and we are able to increase gas export to 24bn m³/yr relying on domestic reserves. Tanap's final transit capacity is expected to reach 31bn m³/yr by 2030.

Aliev said that some upstream projects were being evaluated, including French major Total’s Absheron gas field with 350bn m³ and the gas layer of Azeri-Chirag-Guneshli oil block (ACG) with 233bn m³ reserves. Currently, the block produces more than 12bn m³ /yr of associated gas, most of which is re-injected into the block to maintain oil output level.

"Total must submit the development plan for Absheron by the end of 2016 and the commercial decision over the field will be taken in 2017. Of course, for now Absheron is aimed at supplying domestic markets, but it paves the way for allocating other sources for exports by 2024," he added.

Socar, BP and other shareholders are discussing a new production-sharing agreement for the gas reserves that underlie the ACG oil block. Earlier the head of Socar said that the agreement on the gas layer of ACG would be signed in autumn. The layer can produce 4-5bn m³ /yr of gas.

Aliev added that since 2000 some 120bn m³  have been re-injected. "The volume in 2015 reached 9bn m³ and will increase to 10bn m³  in 2016. The re-injected gas is never lost, it is in the oil layers and can be re-extracted. We expect a huge associated gas re-extraction from this block by 2025 and the marketing issues for these reserves can be discussed then."

Azerbaijan also plans to develop Umid, Babak, Shafag\Asiman gas fields in future.

Azerbaijan's gas projects 

Investment in the Shah Deniz Phase 2 project (SD2) reached $12bn by early June 2016, Aliev said, during a meeting with the local NGOs on June 28. He added that 74.2% of the planned works have been already completed. Nine out of 26 planned operation wells have been already drilled. The total investment for SD2 is expected to stand at $23.8bn by 2020.

The resources of SD1 are estimated at 200bn m³, SD2 at 400bn m³3 and SD3 (projected to be operational in 2032) at 600bn m³.

Shah Deniz Alpha platform (Credit: BP)

Shah Deniz platform (Credit: BP)

Russia, Iran talks multi-billion Kazakh, Turkmen projects

Russian is expanding its foothold in both Kazakhstan and Uzbekistan. A month after Russia promised to invest $12bn in Uzbekistan, Kazakh president Nursultan Nazarbayev told Russia-24 TV that Moscow and Astana were discussing joint projects with a combined value of $25bn. "If we do not count oil and gas-related projects, there are some $6-7bn left for engineering, processing, small and medium-sized enterprises, services," he said.

And Iran said June 27 that it will import gas worth $30bn from Turkmenistan over the next ten years and will export the same worth of engineering goods and services to Turkmenistan. According to Opec’s annual statistical bulletin, Iran doubled imports of gas from Turkmenistan to above 9bn m3 in 2015.


Ilham Shaban